Gold has always been the go-to hedge investment for centuries. Nowadays, even the most casual of investors are highly encouraged to own gold to protect cash assets against a potential fall of the dollar. The recession in 2008 proved that the dollar is not invincible. Subsequent political events, such as the Brexit vote, have shown investors that currency may not be as strong as one thinks. If you are thinking about using gold as a hedge, here are several excellent ways to do that:
Buying Directly from Dealers
The best way to invest in gold is to actually own physical gold. The gold bullion has been the historically accepted version of precious metal value. Modern investors can buy gold coins, bullion or bars directly from dealers. You can find scores online, but you definitely should do your research and find a reputable dealer to avoid getting scammed. Well-known gold dealers like Lear Capital offer decent prices based on daily spot prices, and also offer storage options. It’s recommended to own gold in the form of national mint coins. These are easier to trade and are also accepted for IRAs.
After direct ownership, gold ETFs are the next popular form of gold investment. ETFs are a category of mutual funds based on a stock exchange index. A gold ETF’s portfolio, however, is fixed and doesn’t change with time. Popular gold ETFs have gold as the only asset. Prices are based on the market value of gold. You can find gold ETFs to invest in by looking for the “GLD” sign the stock index.
Gold Mutual Funds
Gold mutual funds do not have any physical gold. Rather, gold mutual funds have portfolios with stocks of gold mining companies. Good gold mutual funds have stock in the most senior mining companies with years of experience in the field. So you can be sure that the mining company won’t go bust after one or two digs.
This option is for veteran investors. Gold futures are where investors speculate about gold prices in the coming months. While useful, gold futures have an expiration date. So this form of investment is considered a bit risky.
If you are thinking about investing in gold, you can try any one of the above options.